Alberta's oilsands: investment, jobs and prosperity

Welcome to Fort McMurray sign in Fort McMurray...Image via WikipediaBy Harvey Enchin
Source: The Vancouver Sun

Here's my take on the oilsands, which appeared as an editorial in The Vancouver Sun Nov. 24, 2010.
World energy consumption of oil, natural gas, coal, nuclear energy, and hydroelectricity fell by 1.1 per cent last year, the first decline since 1982. But environmentalists might want to postpone their celebration. The decline was the result of recession, not conservation, mainly affecting North America and Europe. Energy use soared in developing nations; indeed, it doubled in China, with oil retaining its position as the No. 1 energy source.
Once the economic recovery gains momentum, energy-consumption growth should resume its vigorous ascent.
This is good news for Canada, and particularly for Alberta and British Columbia, which are blessed with bountiful reserves of oil and natural gas. Of course, the main repository of wealth is Alberta's oilsands, which have drawn global energy companies en masse to Fort McMurray and environs.
Their plans include hundreds of billions of dollars in investment, generating an estimated $1.7 trillion in economic activity and 465,000 direct and indirect jobs over the next 25 years.
From the past decade through the next, the oilsands are expected to contribute $800 billion to gross domestic product and $123 billion to provincial and federal governments through royalties and taxes.
A single company, Total E&P Canada, a unit of Total SA of France, has interests in five major oilsands projects and intends to invest $15 billion to $20 billion in the Alberta economy. By itself, Total's 75-per-cent stake in the Joslyn North Mine Project will require direct capital investment of $7 billion to $9 billion. Total has 280 people in its Calgary office today but figures that number will rise to 1,300 over the next 10 years.
When president Jean-Michel Gires popped into Vancouver recently, he wasn't sightseeing. He was recruiting. With a population of only 3.6 million, he explained, Alberta cannot supply all of the labour needed to develop the oilsands. Even today, people from all over Canada, and abroad work at the oilsands with Ontario accounting for 20 per cent of the approximately 250,000 direct and indirect jobs to date.
And what kind of jobs are on offer? According to Statistics Canada, the average gross weekly earnings of non-farm payroll employees in Canada amounted to $860 as of August 2010. The average weekly earnings in the mining and oil-and-gas-extraction industry were $1,801. In other words, these are jobs that pay roughly $100,000 a year.
To aid its recruitment efforts, Total funds scholarships and research partnerships at universities, including the University of B.C.
The oilsands are crucial to North American energy security, a fact that U.S. President Barack Obama occasionally forgot in his recent rhetoric about "dirty oil." Canada already delivers the equivalent of 2.5 million barrels of oil and petroleum products a day to the U.S., making it by far the country's single largest supplier.
The oilsands represent a long-term commitment from the many domestic and international players developing the resource. Despite all the noise about "green" energy, fossil fuels will be the dominant energy source for many decades to come. In fact, Alberta's reserves are measured in centuries.
All of this translates into a promising and prosperous future of well-paid jobs, revenue for governments to pay for health, education and social programs, and abundant energy to fuel Canada's economic growth.
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